Congressman introduces Equine Tax Parity Act
On March 6, 2012, Congressman Andy Barr (R-KY) introduced the Equine Tax Parity Act (H.R. 998), which would make horses eligible for capital gains treatment after 12 months, rather than 24, similar to other business assets.
Under the current federal tax code, gains from sales by individuals of property used in a trade or business, including horses, qualify for long-term capital gains and are subject to the maximum capital gains tax rate of 15% for taxpayers earning less than $450,000 or 20% for those earning more. Since the individual tax rate can go as high as 39.6%, the lower rate is a real advantage.
“Horses held for breeding, racing, showing or draft purposes qualify for the capital gains rates only if they are held for 24 months. All other business assets (except cattle) qualify if held for 12 months,” Said AHC president Jay Hickey. “We believe this is unfair to the horse industry and there is no reason why we should not be treated the same as all other businesses.”
The Equine Tax Parity Act would end this discriminatory treatment of horses under the tax code and allow horse owners to enjoy the reduced rate upon sale after holding a horse for 12 months. For most owners and breeders shortening the capital gains holding period to 12 should be a benefit. Reducing the holding period by half would give many horse owners and breeders more flexibility to sell and market their horses. It would mean that every sale of a horse which is held for at least 12 months will qualify as a capital gain or loss unless that horse is held primarily for sale.
“We appreciate Congressman Barr introducing this legislation and highlighting this unfair tax treatment of horses, we will work with the Congressman to get it passed,” said Hickey. F
–American Horse Council
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
Jill Rigler is not your average 17 year old.